Types of Health Insurance in the USA

Five major types of health insurance are available in the U.S. These include traditional health insurance; Health Maintenance Organizations, or HMOs; Preferred Provider Organizations, or PPOs; Point-of-Service plans, or POSs; and Exclusive Provider Organizations, or EPOs. There are slight differences between the plans, and it's important to understand each of them so you know what your coverage options are.

Traditional

• Traditional health insurance plans offer maximum flexibility because you can pick any doctor you like, and visit a specialist without the permission of your primary care physician, or PCP. A primary care physician is a doctor who provides your basic, everyday medical services. In a traditional plan, you have to spend a pre-determined amount, or "deductible," each year before your insurance coverage kicks in. Traditional plans tend to be more expensive than other types of plans.

Health Maintenance Organization

• HMO plans generally ask that you choose a primary care physician who is part of their network of physicians. Most HMOs require approval from your primary care physician before you can see a specialist, if you want the visit to that specialist to be covered by the insurance plan. HMOs don't have a pre-determined deductible amount; rather, you pay a "co-pay" for each treatment, which is a fixed dollar amount depending on the type of medical service you receive.

Preferred Provider Organization

• PPO plans are more flexible than HMO plans but not as flexible as traditional plans. In a PPO plan, you can choose to visit whatever health care providers you choose; however, certain doctors that are "in-network" will result in a lower co-pay amount. PPOs generally offer more coverage than HMO and traditional plans.

Point of Service

• POS plans are essentially a combination of HMO and PPO plans. You choose a primary care physician within the insurance company's network, and pay a small co-payment for treatments from this physician, similar to an HMO. However, in a POS plan you can also visit a health care provider that's out-of-network if you pay a percentage of the fee.

  There may be restrictions on the services you can receive outside the network with a POS plan. For example, prescription drugs, organ transplants, treatment for infertility, and mental health services may not be included.

Exclusive Provider Organization

• EPO plans are similar to both POS and HMO plans. In an EPO, you choose a primary care physician who's in the insurance company's network. However, out-of-network benefits are reduced, so there's a strong incentive to visit in-network physicians for treatments.